If you are buying or selling a home, real estate negotiations will be part of the process. Even though you should be working with a professional real estate agent, you must understand how to handle the negotiations. With proper preparation and guidance, you will get the house that you want on terms you are comfortable with.
When you are looking at homes and can meet with the owners, listen more than you talk. Rather than thinking about where you might put your china cabinet, go on a fact-finding mission. Keep your ears open for how important pricing and timing are to the seller.
For instance, is the family relocating to another city and getting the home sold quickly, or is the current owner comfortable waiting until the right deal comes along? You need to have as much information as possible going into the negotiation process.
While much of the communication occurs between the agents, you may be present for some or all of the conversations regarding negotiations. When you are not, your agent must have the data regarding your wants and needs so that they can advocate for your expectations.
It is also possible that your local newspaper can shed some light on why the property is up for sale. For instance, a large company making significant cuts in the workforce might leave former employees looking to sell their homes quickly.
Engaging sellers during the open house provides you the opportunity to ask casual questions about the home and their reasons for selling.
On the other hand, if you are the seller, you will want to find out as much as possible about the buyer. This is all about gaining leverage during the negotiations. In many instances, it is the best-informed person who comes out on top of these deals.
Many different points can come up during the negotiation phase.
Here are some of the most common ones:
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Price
This is one of the first issues that will come up during the negotiations, so it is important to make sure you know how far you are willing to compromise. This way, you won’t end up making a mistake that you will regret later on down the line.
While sellers rarely get the asking price and buyers often have to cough up more than they want to, both parties can usually find a place to meet in the middle.
Date For Closing
The closing date is one of the most important ones in the entire process of buying and selling homes. This is when everything is going to change hands officially. When sellers need to quickly cash in on their home’s equity, they will generally not want to delay the date any further than necessary.
As a potential buyer, this is where your research can come in handy. You can use that urgency to work through other negotiation points because you know how valuable an early date is to the seller.
Leaseback
If you are a buyer, the seller might be under a lot of stress to get everything done in a short period of time. Buyers have the option of offering sellers the opportunity to remain in the home for a preset period of time.
This is a chance for you to give them something that the other potential buyers might not have considered.
The leaseback doesn’t put any money in your pocket for the month or two that they remain in the house. However, it is a good way to entice them to accept your bid, not to mention that you can focus on your own home moving and planning needs.
Repairs
Unless a home recently underwent a complete renovation, the chances are good that some repairs will be necessary. Both sides of the negotiation fence need to be ready to discuss this issue. Knowing where you stand beforehand can shorten the negotiation period.
For instance, sellers may be aware of certain repairs that they simply don’t want to make prior to selling. For instance, a swimming pool that hasn’t been well maintained over the years. On the other hand, this does allow the buyer to ask for a lower price because this task will take money to fix and bring the pool to good condition.
Large Home Appliances
It is important to get this one out of the way early. When walking through an open house, find out which appliances will be included in the sale. In some cases, this might be a negotiable point for both sides to get what they want.
For instance, the buyer might want to keep the same refrigerator in there because it matches the existing decor, and a new one would be too expensive. If the seller understands how important that is to the buyer, it can be used to get them to give in on a different point. For instance, perhaps the closing date or other aspects of the negotiation process.
Closing Costs
When buying or selling a home, there are many costs involved at the closing. The specifics can vary from one state to another, but it is often a point of negotiation. You must find out which costs are likely to apply to your situation and why they are there. How are the expenses generally assigned, and are there any rules regarding payments?
Use the information that you have gathered when you go into the negotiation process. Like the other aspects of negotiation, knowing where the other party stands on the matter will give you a stronger position in the negotiation room.
Real estate negotiations are a tricky aspect of the sales process. This is why you must know what to expect and have prepared yourself before you begin, whether you are planning to buy or sell a piece of residential property!
